UPDATE 3-Spaniards protest before elections despite ban

* Ruling Socialists face heavy defeat

* Protests unlikely to change results of Sunday's elections

(Adds details)

By Inmaculada Sanz and Carlos Ruano

MADRID, May 21 (Reuters) - Tens of thousands of people
filled Madrid's Puerta del Sol on Saturday evening to protest
high unemployment and austerity measures, defying a ban on
demonstrations on the eve of local elections.

Protesters of all ages including families with small
children and pensioners joined hundreds of young Spaniards, who
have been camping out in Madrid for a week, in peaceful protest
against the government's handling of the economic crisis.

The number of demonstrators, dubbed "los indignados" (the
indignant), swelled to around 30,000 people on Saturday night,
cramming into Madrid's main square and surrounding streets.

"I'm protesting because I've got no job future in Spain even
though I've finished my degree in tourism," said 25-year-old
Inma Moreno in Madrid. "This should make the political classes
aware that something is not right."

Protesters also gathered in Barcelona, Valencia, Seville,
Bilbao and other cities urging people not to vote for either of
Spain's two main parties, the ruling Socialists or the
centre-right opposition Popular Party.

The Socialists are expected to suffer major losses in the
elections for 8,116 city councils and 13 of 17 regional
governments.

Prime Minister Jose Luis Rodriguez Zapatero, who has failed
to contain the highest unemployment in the European Union at
21.3 percent, has said he understands the protesters.

UNEMPLOYMENT

Until now, Spaniards have been patient with austerity
measures and a youth unemployment rate of 45 percent, but the
protests show the frustration over the prolonged economic
malaise.

"I'm happy that they're finally protesting. It was about
time," said Maria, an elderly woman with a cane, sitting next to
a sleeping, dreadlocked young man on a sofa that had been moved
into the Puerta del Sol plaza.

The woman, who declined to give her family name, said she
was at the protest on Saturday to visit her grandson.

"We knew something like this would eventually happen.
Spain's politics has not been very convincing and with all the
effects of the crisis. Something had to happen," said
sociologist Fermin Bouza of the Complutense University.

Fearing violent clashes, the government has not yet sent in
police to enforce the ban, which went into effect at midnight
and prohibits political events on the eve of the election.

Many protestors called on people to respond to any violent
outbursts by forming a circle around the perpetrators and
sitting on the ground with arms interlocked.

Each evening when the numbers of demonstrators swell,
immigrants move through the crowd selling beers out of backpacks
-- raising the possibility that alcohol could sour the so far
peaceful mood of the crowd.

"It's a revolution, not a drinking party," said signs,
trying to discourage protesters from turning the demonstrations
into a gigantic "botellon", the Spanish word for gatherings of
young people in city parks in the summer to drink.

Movement organisers were making efforts to keep the square
clean on Saturday, using brooms donated by supporters.

Spain pulled out of recession at the start of last year but
the economy has failed to gain serious momentum and unemployment
has spiralled ever higher.

The government's borrowing costs have risen as investors see
a risk that slow growth will make it impossible for Spain to cut
its deficit, possibly setting it up for a financial crisis and
rescue such as in Greece, Ireland and Portugal.

On Friday, the risk premium on Spanish government bonds
jumped to its highest level since January due to concerns over
Greece's need for a bigger bailout and that the election result
in Spain would make it tough for the Socialists to implement
further austerity measures.

Despite attracting huge media attention, analysts said the
protests would not change the outcome of Sunday's elections,
other than to deepen the Socialist rout by motivating some
people to vote for small leftist parties.

"It'll have a very marginal effect, unless there's some kind
of violent outbreak over the weekend, which I doubt," said
Fernando Fernandez, an analyst with IE Business School.
(Additional reporting by Paul Day; Writing by Fiona Ortiz,
Editing by Alison Williams)